Counties gather to address mineral lease money issues

Carbon Commissioner Bill Krompel discusses several issues with Uintah Commissioner Dave Haslam before the meeting of mineral producing counties last Wednesday. Representatives from a number of counties decided to ask the state to audit the incoming funds to determine whether the federal government is paying Utah what it is owed from mineral lease royalties.

Commissioners and representatives from eight counties in Utah met in Price last Wednesday and decided it was time that they and the state needed to look at what federal mineral lease moneys are coming into Utah coffers and how that money is being disbursed.

The issue has been on the burner for a long time, but changes in the way the state has passed out the money once it has received the funds has raised some eyebrows this past year.

Representatives from Carbon, Emery, Daggett,Garfield, Grand, San Juan, Summit and Uintah counties agreed that the state auditor should look into the money problems and report back to the officials about the situation.

"The mineral producing counties all feel like we have been shorted on these funds for 25 years," said Uintah Commissioner Dave Haslam, who led the meeting. "The mineral extraction industry has a big impact on our county, and after we dug into the situation and found some information, it doesn't look like we are getting what we are owed."

The last time the mineral producing counties met, the officials decided that they needed help from the state to get to the bottom of things. More than two weeks ago, representatives of the group met with Gov. Olene Walker to discuss the matter. The governor told the counties that she also wanted to get to the bottom of the issue.

At that time, Walker appointed former Emery County Commissioner Randy Johnson, who now works on land issues for the chief executive, to act as a liaison to work on resolving the problem. Jonhson was at the meeting Wednesday and reported to the group regarding the progress he had made in beginning to investigate the problem.

"As I talked with various people in state government I realized that no one had an overall picture of what has been going on these many years," said Johnson. "A lot of people have a good idea of the little segment of it they deal with when it comes to the federal system, but no one has numbers on the whole thing."

Johnson indicated he had come to the conclusion that what needs to happen is that the state auditor needs to look into the problem with overpayments and underpayments and to solve the problems of having definite numbers to work with when calculating what the mineral producers have been paying the national government as compared with what is being returned to the state and counties.

"There just needs to be one entity that is a clearinghouse for this money," said Johnson. "Most of us don't have all the sides of the equation so we can't tell if we are being treated fairly or not. "

Johnson said he had already spoken with a state auditor and he has agreed that an audit is needed. The auditor also said his department could act as a clearing house for the situation.

He pointed out however that first the auditors office would need funding to do the audit, either with their own people or by contracting it out, and that the issue may take some legislative action to accomplish.

In simple terms, an audit would compare what mineral producers have been paying for years and what is being returned to the state to be disbursed amongst the counties.

Getting those numbers from industry may require some long, hard work.

But according to Johnson the real problem will be getting the federal government to pay back and present revenues they may have collected and to correct the system from now on to reflect the true numbers.

"There in lies the crux of the problem," lamented Johnson. "At some point there will be some hard ball to be played between the state and the federal government."

That of course, means legal help and possibly court cases. That too means there must be money up front to fight for the cause. That led to discussion about funding the battle.

Suggestions were made the Community Impact Board could possibly provide some help and Johnson thought that might be an idea, but that it would be money that would have to be repaid later.

Funds from the Constitutional Defense Fund, a pool of money that has been taken from mineral lease returns that has been set aside for disputes with the federal government, was also suggested as a possible source of funding.

"We need to be careful of that fund because we all know that we will probably need that money for another issue," stated Haslam, referring to what most counties see as a battle on the RS 2477 road fight that appears to be looming.

There was also discussion about how far back the auditors should check for the number since the problem appears to have been going on for at least a quarter of a century.

Haslam suggested that the audit should go back to at least January of 1999 and most of the other representatives agreed.

The group decided that an oversight committee would be formed with representatives from various counties to oversee the process and then to make decisions with the state when the figures are revealed.

The discussion also involved the situation with the state's disbursement of mineral lease funds due the counties.

At present most of that money is funneled through the Utah Department of Transportation and a new administrator there has changed the way the money is disbursed.

That was another issue the counties will be asking the state about, but the money coming from the federal government will be the main emphasis of the action.

"Regardless of whether we get money from the CIB or from the defense fund, we need to make a commitment to pursue this for the good of the state and the counties," concluded Carbon County Commissioner Mike Milovich.